Food itself plays major role in demand for food

Sept. 8, 2011
- by
Morton Sosland

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In dealing with a plethora of negative assessments of the global economic outlook, the temptation is great to embrace any positive sign. None is more welcome than evidence of market growth as measured by that most basic of all statistics, the count of consumers. Here the attention is to global numbers, in part because this year marks another milestone, the milestone addition of one billion. For the food industry, hardly anything is more important than consumer numbers. Equal weight ought to be assigned to global market measures as well as hugely important supply-demand equations. These govern the cost of everything from processing equipment to essential ingredients. What the food business needs to know is how best to balance record-setting market expansion against the way this affects the costs of business.

Thanks to studies by the Population Reference Bureau, it may be stated that global population will reach 7 billion near the end of this year. As staggering as that may be, its significance is magnified by this: “Today the world is adding the largest numbers to the population as in any time in history.” Such a statement may seem contrary to the declining annual population growth rate, to 1.2%, compared with more than 2% a few decades ago. The simple explanation is that the current growth rate, with the downward trend nearly universal, means adding 83 million persons annually, whereas the same growth in 1930 would have meant yearly gains of 30 million. The highest growth rate in history was 2.1% in the late 1960s and if that had held, the increase would be 117 million and today’s population would be 8.6 billion.

Achieving the seventh billion in 2011 took 12 years, the same as the interval between 5 billion and 6 billion. Remembering that the first billion did not occur until 1800 and that 130 years were needed to reach 2 billion in 1930 underscores the rapidity of current expansion. Looking ahead, the bureau says the record-breaking 12 years to add a billion will likely rule in bringing 8 billion in 2023.

Without exploring the wide diversity in population changes among continents and countries, the Population Reference Bureau presents a dramatic contrast between Italy and the Democratic Republic of the Congo. Italy has a population today of 61 million and Congo is 68 million. Projections for 2050 show Italy’s population holding at 62 million and Congo expanding its population to 166 million. Annual births in Italy are forecast at 560,000 and deaths at 590,000, compared with 3,050,000 and 1,140,000 respectively, for Congo. The current annual global gain stems from 139,558,000 births and 56,611,000 deaths to result in a natural increase of 82,947,000.

While people are the all-important force behind demand, the Italy-Congo differences ought not be neglected. Indeed, the annual natural increase rate near 83 million is made up of 81 million in less developed nations and 2 million in the more developed countries.

Like in America, economic status hugely influences food demand. That is why it’s important to realize that the most rapid population expansion is occurring among the poorest. At present, 48% of the world lives in poverty, meaning incomes below $2 per day. In India, which will become the most populous country, ahead of China, by 2050, 76% live in poverty. Yet, it is expanded urban residency and the positive effect this exerts on incomes that spur birth rate declines.

While economic advances and improved public health are hugely important influences on population, it is fast growing urbanization and modern medicine that are specifically credited with current trends. Often overlooked is the grand role food itself has played in influencing family size. Modern processing and distribution have totally transformed the role of the family in assuring food adequacy. In many ways, the global food situation has as much to do with population size as any other factor, indicating how food has become an important determinant of its own demand.

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